Showing posts with label soul. Show all posts
Showing posts with label soul. Show all posts

Wednesday, January 20, 2016

Failure to settle an off the plan contract was a costly decision

The Queensland Supreme Court recently decided a case involving an off the plan apartment contract in the Soul building at Surfers Paradise.

The case is Juniper Property Holdings No 15 P/L v Caltabiano (No 2) [2016] QSC 005 

Mr Caltabiano purchased the penthouse in Soul in July 2006 for $16.85 million, a lot of money for a 519 sqm apartment.  Mr Caltabiano failed to settle upon completion of the building in 2012.  So the developer forfeited the deposit, and sued Mr Caltabiano for damages.  The developer resold the penthouse in April 2015 for $7M.  So the claim for damages was $8.8M plus interest under the contract for failure to settle for over $3M.

Mr Caltabiano claimed that the sales agent was misleading -- it was claimed that at the request of Mr Caltabiano, the sales agent provided information in an oral discussion regarding supposedly comparable sales in Jade and Q1.  Mr Caltabiano never checked whether this information was correct.

The judge decided that the sales agent did not make the alleged misleading statements.  Even if they were made, they were not relied up by Mr Caltabiano.

  1. "The defendant submits that the fact that he did not obtain external advice as to the value of the Soul penthouse or the prudence of the purchase only serves to emphasise his reliance on the alleged representations. However, in my view, it is commercially illogical and inherently improbable that in deciding upon a $16.85 million purchase the defendant would not have obtained such advice because of reliance on the alleged representations made by the plaintiff’s sales consultant comprising comparisons with properties that the defendant did not know anything about. This is where the defendant’s story is incredible." 
See http://www.sclqld.org.au/caselaw/QSC/2016/005

This shows one of the many dangers of buying off the plan.  Values may go down substantially between contract and settlement, but you still have to settle.  And if you don't, then you are in big trouble.

Tuesday, March 18, 2014

Gold Coast - Soul

From Mantra:

I am a representative of the Mantra Hotels Group, who have recently taken ownership of Sea Temple Surfers Paradise, under the Peppers Brand.

The property has been re-branded Soul Surfers Paradise and Peppers are keen to revitalise both the hotel and the Seaduction restaurant under their luxury hotels brand.


We'd appreciate you letting your readers know of the changes at Soul:


Saturday, December 15, 2012

Soul Surfers Paradise

The receivers of Soul have started a marketing campaign.  See www.soulatsurfersparadise.com.au.  The pricing on the Internet seems to show high discounts for the more expensive apartments.



Sunday, November 4, 2012

Juniper's Fire Sale of Retail Assets

The collapse of the Soul development at Surfers Paradise must be really hurting the Juniper empire.  Juniper has listed what appears to be all its retail investments for sale, looking for offers this month.  Looks like a fire sale.  The Sea Temple Gold Club at Port Douglas is also for sale through the same agents, but it is unclear if this is also a sale by Juniper.  Many investors have lost money over the years buying from Juniper.  Now it is Junipers turn.


Thursday, October 25, 2012

Trouble In Paradise - Soul

The Soul apartment development in Surfers Paradise went into receivership today, most likely due to a large number of unsold apartments, pre-completion off the plan contracts that did not settle, and a falling Gold Coast market.  This is not a surprise.  The Oracle development at Broadbeach went into receivership last year.  At Soul, receivers were appointed over a number of Juniper companies.  Graeme Juniper, who developed a number of apartment complexes on the Sunshine Coast, bit off more than he could chew and got his timing wrong.  See Soul in Receivership

Sunday, October 7, 2012

Soul's Last Legs?

Juniper agents are doing the ring around, with the "price has dropped" call for Soul at Surfers Paradise. Sounds like signs of desperation.  How long until Soul goes the way of Hilton and Oracle, and heads into receivership?

Sunday, June 17, 2012

Luxury Apartments

Sunday, April 1, 2012

Surfers Paradise

I visited Surfers Paradise this weekend to look at the Hilton and Soul apartment buildings.  The local area was no paradise.  The beach was great, but the built environment was horrid.  Closed or run down shops.  Poor quality shopping.  Fast food restaurants.  Topless bars.  Bad street-cape.  Not a nice place to visit with the family or for a romantic vacation.  No wonder prices have fallen, and according to Matusik, they still have a way to go to reach bottom.  Hilton tower illustrated above.

Friday, January 20, 2012

Juniper's Soul

It is hard to tell, but it appears that only about a third of the apartments purchased off the plan in the first stage of the Soul tower at Surfers Paradise have settled.  Juniper, the developer, must not be happy about this.

Friday, December 23, 2011

Soul

A new Soul website, that shows actual interior photos of apartments, has been launched.  It appears that less than 100 apartments have actually settled to date.  A number of off-the-plan contracts have crashed.  The building is being managed by Mirvac, soon to be Accor, under contract.  Mirvac did not purchase the management rights.

Saturday, November 19, 2011

Buying Off The Plan from Juniper

A number of people have asked me whether now is a good time to buy an apartment on the Gold Coast, particularly at Juniper's Soul building that is almost complete.

According to a number of property experts, the Gold Coast property market is still in decline, and further price falls are expected.

Let's look at Juniper's immediate prior luxury development, which is Oceans Mooloolaba.  Did buyers from Juniper do well or not?  It is sometimes hard to tell looking a public data, because Juniper gives under the table rebates to purchasers, so the exact initial purchase price from Juniper is not necessarily what is reported to the government.

Here is the evidence:

  • Apt 704, sold by Juniper for $2,500,000 in 2005; resold in 2011 for $1,805,000.
  • Apt 606, sold by Juniper for $1,580,000 in 2007; resold in 2011 for $1,650,000.
  • Apt 503, sold by Juniper for $1,300,000 in 2007; resold in 2009 for $1,070,000.
  • Apt 404, sold by Juniper for $1,380,000 in 2005; resold in 2007 for $1,200,000.
  • Apt 404, sold by Juniper for $1,370,000 in 2003; resold in 2006 for $1,150,000; resold in 2010 for $1,115,000.
  • Apt 401, sold by Juniper for $1,670,000 in 2003; resold in 2009 for $1,500,000.
  • Apt 303, sold by Juniper for $1,320,000 in 2006; resold in 2007 for $1,025,000.
  • Apt 301 sold by Juniper for $1,600,000 in 2003; resold in 2009 for $1,445,000.
  • Apt 203, sold by Juniper for $1,750,000 in 2004; resold in 2010 for $1,800,000.
Taking into account stamp duty, everyone who has purchased from Juniper and then resold has lost money.  Some of the resales were before the market collapsed in 2008.  One suspects that it would be best to wait before buying in Soul or anywhere on the Gold Coast for that matter.


Wednesday, November 2, 2011

Gold Coast and Soul

Herron Todd White says that the Gold Coast apartment market is still in decline.

It will be interesting to see how many of the Soul apartments actual settle.  Some photos of Jupiter's Soul -- the place looks bare and barren.


Saturday, September 24, 2011

Gold Coast Settlements Off the Plan

The Hilton and Soul (Sea Temple) apartment complexes at Surfers Paradise on the Gold Coast have many off the plan apartment sales that are to settle now.  It seems that settlements are taking a long time, and that about 25% of the people who signed contracts are unable or unwilling to settle.  See The Australian.

Friday, September 16, 2011

Settlements Start At Soul

ANYONE who thinks Soul is heading for receivership because buyers won't settle will be "sadly disillusioned", veteran developer Graeme Juniper says.
The $850 million Surfers Paradise project has been 11 years in the making and Mr Juniper plans to see it through to the end.
"We have the complete support of our financiers and we are with this journey all the way through," the co-managing director of Juniper Group said.  "We will be delivering this building and Juniper will be there -- it's that simple."
Settlements of the first stage of the apartment project began on Tuesday, a process expected to take months to complete.

The family-owned Juniper Group has contracts on 173 apartments in the first stage, but Mr Juniper could not disclose how many had settled.

He confirmed Juniper Group was still finding buyers despite the dire Gold Coast apartment market and that he had secured an unconditional 30-day contract for an apartment yesterday.

See Gold Coast Bulliten

I am not sure why settlement will take months.  Usually, all settlements (even for a large building) are done in less than a week.

Sunday, September 11, 2011

Gold Coast High Rise

The headline of an article on page 21 of the Weekend Australian Financial Review this weekend is "Gold Coast high rise gets a nose bleed."

The article reports that more than $1 billion of apartments purchased at the top of the market are due to settle soon in The Oracle and Juniper's Soul developments.

Lawyers are apparently circling to try to get buyers out of contracts.  For example, it is said that Nyst Lawyers believe buyers can get out of their Soul contracts because the Soul development is now being managed by Mirvac under the Sea Temple brand.  What a crazy argument.  The buyers want to get out of the contracts because the contract price that they promised to pay is now too much.  The buyers took a risk, and lost out.  You have to be very careful when buying off the plan.

The AFR reports that prices in Soul are down about 17%, based on one resale of a 23rd floor three bedroom apartment, 161 sqm, that sold off the plan for $1.8 million and resold in February this year for $1.5 million.

Friday, September 2, 2011

Soul to be branded as Sea Temple

The Juniper Soul building on the Gold Coast will be managed by Mirvac under the Sea Temple brand. With settlements due very soon, it will be interesting to see how many actually settle. Or will we have another Oracle problem? There are already dark shadows and issues about soul food. Even the development debt is for sale.

Friday, June 10, 2011

Soul and Mirvac and Oracle and Hilton

LISTED property trust Mirvac Group will operate a luxury hotel at Juniper Group's Soul apartment complex on the Gold Coast.

It is understood Juniper had been speaking to potential operators about incorporating a hotel/resort in the development which had originally been planned as purely top-end apartments.

Juniper and Mirvac are close to finalising an agreement, industry sources say.

Apartment values on the Gold Coast have fallen by up to 50 per cent due to oversupply of projects, many of which were started before the global financial crisis.

The resort in the Soul complex will compete with Mantra's five-star Peppers Hotel at the newly- built $700 million Oracle Broadbeach tower and also the Hilton Surfers Paradise Hotel and Residences, which was part of a development launched by failed Gold Coast developer Jim Raptis.

There is a total of 20,000 hotel rooms on the Gold Coast.

The Hilton hotel is on the market with price expectations of more than $60m on behalf of receivers acting for ANZ.

Oracle was also placed in voluntary receivership in December by Michael Nikiforides, a director of South Sky Investments, a Niecon-related company.

It was also suggested Mirvac briefly looked at takeover target Oaks Hotels and Resorts, for which Thai-based conglomerate Minor International is now a majority shareholder.

Mirvac was not available for comment yesterday.

It is understood that at least 200 apartments in the Juniper Group's Soul apartment project at Surfers Paradise are due to settle in stages from July.

Industry sources said Juniper had been marketing the Soul apartments in Asia with the promise of three-year rental guarantees on a $2m apartment, equating to $2000 a week. There are still 92 apartments remaining for sale at Soul, according to the Midwood Report, although the group provided no details on sales in the complex during the February quarter.

The yet-to-be-completed 77-level Soul tower fronts both the beach and Surfers' main retail strip, Cavill Mall, on the corner of The Esplanade and Cavill Avenue.

The Australian

INVESTORS who bought into the failed $700 million Oracle Broadbeach development on the Gold Coast have been trying to offload their apartments at auction, but are finding no buyers, according to real estate sources.

It bodes unfavourably for the 200-plus pre-sold apartments in the Juniper Group's Soul apartment project at Surfers Paradise, due to settle in stages from July.

It is understood Juniper has been marketing the Soul apartments in Asia with the promise of three-year rental guarantees on a $2m apartment -- equating to $2000 a week -- and has involved a corporate advisory firm.

Market sources said the apartments at Oracle, on Elizabeth Avenue, Broadbeach, had been put to auction after the investors had settled with the receivers. But the apartments had not sold, mainly because of an expectation receivers would put more stock on the market at steeply discounted prices.

Oracle was placed in voluntary receivership in December by Michael Nikiforides, a director of South Sky Investments, a Niecon-related company. Niecon, of which Con Nikiforides is the chief executive, developed Oracle.

One Oracle apartment owner said then he was aware of people who had bought apartments for $3.5m and had since sold them for $2.5m. As at January, it was believed the developer had secured about $160m from more than 400 pre-sales in the 505-apartment complex, and between October and January about 180 of those had settled.

The value of Gold Coast apartments has typically fallen by 30 per cent since the global financial crisis.

The Oracle project is believed to have cost about $700m, with up to $550m in loans from a syndicate including National Australia Bank, Westpac, Suncorp and Bank of Scotland.

Juniper's Soul, which unlike Oracle is not insolvent, has 92 apartments remaining for sale, according to the latest data from the Midwood Report, although the group provided no details on sales in the complex during the February quarter.

The Australian

Wednesday, March 23, 2011

Soul Settlements Coming Up

Soul off-the-plan purchasers in the low rise section are getting ready for settlement. Soul is located at Surfers Paradise, in a prime location. It is a very high end high rise. Photo from March showing progress.

Valuers and banks for purchasers are looking at contracts and doing valuations. I have heard of a situation where the apartment was valued at 70% of the contract price. That may not seem to bad, but if the contact price is $2M, then the purchaser needs to find an extra $600,000 to settle.

And there has been no announcement of who will manage this complex.

Will Juniper survive, or head the same way as Raptis and Niecon?

One purchaser is trying to resell his 2 bed apartment for more than a 3 bed apartment is being valued at: www.soul-apartment.com/

Saturday, March 12, 2011

Gold Coast Sinking Under Apartments Glut

The front page of the AFR on Wednesday, 9 March 2011:

"Gold Coast Sinking in Units Glut"

Summary:
  • 2000 apartments worth an estimated $2 billion listed for sale
  • few buyers
  • dire oversupply
  • only 300 apartments are selling on average each year
  • between 5 and 7 year supply of apartments
  • high asking prices and a reluctance by banks to lend had compounded the oversupply problem
  • NAB less likely to lend to the Gold Coast apartment market
  • Mr Korda, receiver for The Oracle, estimates average apartment price for the past 10 years has been about $400,000, while the average price for an Oracle unit is $1.2M.
  • Soul will add to the glut, where the average asking price for the top third of the 77 storey building is $3.87 million.
  • "If you have a $1 million apartment, you could probably only get bank finance for $360,000" Mr Korda said.
  • Its a price point and liquidity issue.

Saturday, February 5, 2011

Gold Coast Auction Update


The AFR had a headline this week: "Gold Coast results highlight weakness". There were several auction events last weekend on the Gold Coast. Some agencies had clearance rates as low as 10% according to the AFR. The Ray White Sunday auction sold $12.4M worth of property, 41 sales from 103 listings, with an average sales price of $312,000.

A Circle on Cavill penthouse sold for $2.5M, originally sold off the plan for $5.95M. The Gold Coast press calls this a positive sign! How is making a loss of almost $4M a positive sign?
A large Q1 apartment, 3104, sold for $575,000 furnished, less than the mid $600Ks paid for this apartment unfurnished by the previous owner. See photo above.
Two Soul apartments (still off the plan) failed to attract bidders.
The Gold Coast press says that things are looking up! Can anyone explain to me why a large capital loss is a good thing?